Canada Mortgage and Housing Corp. is calling for a "soft landing" in the new housing market and rising prices in the resale market.

CMHC said the number of housing starts is expected to decrease this year and again in 2008.

After 227,395 new housing starts across the country in 2006, that figure is expected to slip to 209,500 for 2007 and 195,500 next year, CMHC said in its first-quarter market outlook.

"Construction activity will continue to moderate as demand for home ownership moves toward more sustainable levels," said Bob Dugan, chief economist at CMHC.

National Housing Outlook
	2006	2007	2008
Total housing starts	227,395	209,500	195,500
Single-detached houses	121,313	109,300	101,300
Multiple housing units	106,082	100,200	94,300
Total MLS sales	483,609	464,550	449,200
Avg. MLS selling price	$276,325	$292,631	$302,181

"Most of the pent-up demand that built up during the 1990s has been absorbed, and higher mortgage carrying costs due to continued strong price growth and modest increases in mortgage rates will contribute to the slower pace of new home construction both this year and next," he said.

In 2007 Alberta is expected to have the third-best year on record for housing starts, despite rising prices that have cooled some of the demand. Starts are forecast to come in at 45,500 units this year and 42,500 next year. That's down from the 2006 level of 48,962.

The Ontario market is expected to cool as a result of slower migration, rising prices and more choice in the resale market. Ontario starts for 2007 are projected to come in at 67,000, while 2008 starts are seen coming in at 62,650.

CMHC also said sales of existing homes through the Multiple Listing Service are expected to slow in 2007 and 2008, while the national vacancy rate is expected to rise slightly.

The average MLS selling price in 2007 is forecast to rise 5.9 per cent to $292,631 and another 4.2 per cent to $302,191 in 2008.